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President Signs Six Month Spending Measure With Dedicated Funding For American Centrifuge RD&D Program

Stocks in this article: USU

President Obama recently signed a six-month spending measure for the federal government that contains funding for continued work on the American Centrifuge research, development and demonstration (RD&D) program. The funding is part of the government’s $280 million (or 80 percent) share of the $350 million cost-share program with USEC Inc. (NYSE: USU), which will support national security and nonproliferation policy objectives through the demonstration of America’s next generation of uranium enrichment technology.

The program was proposed by the administration in its FY 2013 budget submission to Congress and has received bipartisan backing from the U.S. House of Representatives and Senate. The “continuing resolution” signed by the president provides funding at an annual rate of $100 million for the RD&D program. USEC’s cost share is 20 percent, or $70 million of funding for the full RD&D program. USEC has already invested more than $2.3 billion and assembled a robust U.S. supply and manufacturing infrastructure to develop and deploy this U.S. technology.

The federal government had previously provided $87.7 million of cost share funding to support RD&D program operations through the end of November 2012. Additional government funding beyond that included in the continuing resolution will be needed to meet the government cost-share of $280 million and complete the 19-month RD&D program in December 2013. USEC will continue working with Congress and the administration to identify funding sources to accomplish that objective.

The RD&D program will support approximately 1,200 jobs, located primarily in Ohio and Tennessee, along with jobs in 26 other states including Pennsylvania, West Virginia, South Carolina, Michigan and Alabama.

The program calls for the manufacture and operation of 120 uranium enrichment centrifuge machines in a commercial cascade configuration. It seeks to accomplish five key technical milestones to retire technical risk, two of which have already been met, and to lay the groundwork for the commercial deployment of the American Centrifuge technology, which will create nearly 8,000 jobs and provide nuclear fuel to reactors around the world.

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